Jan. 30 (Bloomberg) -- Low demand for U.S. labor is the
“key explanation” for the unusually high long-term
unemployment of many Americans, according to researchers at the
Federal Reserve Bank of San Francisco.

An extension of unemployment benefits, a drop in the
portion of young workers in the work force and changes of
measurement in a U.S. Labor Department survey also account for
an increase in the duration of joblessness, Rob Valletta and
Katherine Kuang at the San Francisco Fed said in a paper
released today.

While the recovery has helped reduce the unemployment rate
to 8.5 percent from a peak of 10 percent in October 2009, the
average job-seeker was without work for 40.8 weeks last month,
compared with 34.9 weeks a year earlier, seasonally adjusted
data from the Labor Department show. People who go without work
for longer periods face poorer prospects for re-employment, a
concern to policy makers struggling to revive the job market.

“Although the unemployment rate peaked at a higher level
in the 1981-82 recession, the average duration of unemployment
has been running much higher in the recent episode,” Valletta
and Kuang said. The recent recession and rebound is similar to
the “jobless recoveries” following the 1990-91 and 2001
downturns, they said.

“The labor market has changed in ways that prevent the
cyclical bounce-back in the labor market that followed past
recessions,” they said.

Chairman Ben S. Bernanke said last week the Fed is
considering additional asset purchases after extending a pledge
to keep borrowing costs low through at least late 2014, citing
the “hardships imposed by high and persistent unemployment.”

The world’s largest economy probably added workers to
payrolls in January, keeping the jobless rate at an almost
three-year low of 8.5 percent, according to the median forecast
of 74 economists surveyed by Bloomberg News.